Equity Residential (EQR)

Vertically-integrated REITs such as Equity Residential are often underrated as their integrated cost-saving attributes are ignored. Equity Residential owns nearly 80,000 apartments in dynamic cities, including New York, Boston, Seattle, Washington D.C., San Franciso, Southern California, and Denver. The REIT is established and arguably possesses a mid-to-upper-market stronghold across the United States.

Equity Residential exhibits a 96.2% occupancy rate with same property operating margins of 68.5%, explaining why the REIT has presented an annual shareholder return of 11.2% since its initial public offering in 1993. Much of the REIT’s success stems from its ability to carve out undervalued deals with capitalization rate growth potential. For example, with its share price at $63.30, the REIT is trading at a ~27% discount to its Green Street estimated net asset value.

Also, its 4.5% same-property embedded growth rate and potential debt reduction could add tremendous value to Equity Residential’s balance sheet, bolstering its already-impressive 3.96% dividend yield. Moreover, the asset is considered highly attractive from a risk vantage point with a beta of 0.78.

Is EQR REIT a Buy, According to Analysts?

Turning to Wall Street, Equity Residential earns a Moderate Buy consensus rating based on six Buys, 10 Holds, and one Sell assigned in the past three months. The average EQR price target of $73.88 indicates 16.3% upside potential.